Write C program to calculate balance instalment

In C programming, calculating loan balance installments involves computing the remaining amount after each monthly payment, considering compound interest. This program demonstrates how to calculate the outstanding balance after making monthly payments on a loan with interest.

Syntax

balance = principal + (principal * (interest_rate / 100) / 12);
remaining_balance = balance - monthly_payment;

Formula for Interest Calculation

The monthly interest calculation follows this approach −

• Monthly Interest: principal * ((annual_rate / 100) / 12)
• Balance with Interest: principal + monthly_interest
• Remaining Balance: balance_with_interest - monthly_payment

Example: Loan Balance Calculator

This program calculates the remaining balance after the first two installments −

Note: This program requires user input. When running online, provide sample values: Loan Amount: 45000, Interest Rate: 7, Monthly Payment: 1000

#include <stdio.h>

int main() {
    float loanamt, interest, monthlypayment;
    float monthly_interest, balance_with_interest, firstmon, secondmon;
    
    printf("Enter the loan amount: ");
    scanf("%f", &loanamt);
    printf("Enter interest rate (annual %%): ");
    scanf("%f", &interest);
    printf("Enter monthly payment: ");
    scanf("%f", &monthlypayment);
    
    /* Calculate first month balance */
    monthly_interest = loanamt * ((interest / 100) / 12);
    balance_with_interest = loanamt + monthly_interest;
    firstmon = balance_with_interest - monthlypayment;
    
    /* Calculate second month balance */
    monthly_interest = firstmon * ((interest / 100) / 12);
    balance_with_interest = firstmon + monthly_interest;
    secondmon = balance_with_interest - monthlypayment;
    
    printf("\nLoan Details:
");
    printf("Original loan amount: %.2f
", loanamt);
    printf("Annual interest rate: %.2f%%
", interest);
    printf("Monthly payment: %.2f
", monthlypayment);
    printf("\nRemaining amount after 1st installment: %.2f
", firstmon);
    printf("Remaining amount after 2nd installment: %.2f
", secondmon);
    
    return 0;
}

Enter the loan amount: 45000
Enter interest rate (annual %): 7
Enter monthly payment: 1000

Loan Details:
Original loan amount: 45000.00
Annual interest rate: 7.00%
Monthly payment: 1000.00

Remaining amount after 1st installment: 44262.50
Remaining amount after 2nd installment: 43520.70

How It Works

The program follows these steps for each month −

1. Calculate monthly interest: Apply the annual interest rate divided by 12 to the current balance
2. Add interest to principal: The new balance includes the accumulated interest
3. Subtract payment: Deduct the monthly payment from the balance with interest
4. Repeat: Use the remaining balance as the principal for the next month

Key Points

• Interest is calculated monthly as (annual_rate / 100) / 12
• Each month's balance becomes the principal for the next month's interest calculation
• The program assumes fixed monthly payments and compound interest

Conclusion

This C program effectively calculates loan balance installments by applying monthly compound interest and deducting fixed payments. It provides a foundation for more complex loan amortization calculations.